3rd vote since 2008 on whether to support SSJID’s bid to lower rates

Ripon’s elected leaders may vote to take a stand for the third time since 2008 on South San Joaquin Irrigation District’s effort to lower power rates in the community by 15 percent.

The City Council during Tuesday’s 7 p.m. meeting will determine the city’s position on the SSJID plan to take over retail power service currently provided by PG&E to customers in Manteca, Ripon, and Escalon.

The Ripon council’s position is especially critical since Ripon holds one of the cities’ positions on the five member San Joaquin Local Agency Formation Commission composed of county and city representatives from throughout the county that must give clearance to the plan before SSJID moves forward.

The council in October 2009 voted 4-0 with Mayor Chuck Winn excusing himself due to a conflict of interest to back the SSJID proposal. That was a reversal of the council’s position a year prior.

It’s been 44 months since the SSJID filed its current application before the San Joaquin Local Agency Formation Commission for permission to sell retail electricity to customers in Manteca, Ripon, and Escalon at rates 15 percent below PG&E prices.

Three years ago, an independent consulting firm issued a report that LAFCO required SSJID to pay for to answer challenges posed by PG&E. The study concluded that SSJID could indeed deliver power at 15 percent below PG&E and was capable of doing so logistically.

PG&E has spent the time since then challenging conclusions made by the consultant that had done work for the San Francisco-based utility before that LAFCo selected forcing SSJID to provide exhaustive responses so LAFCO would feel comfortable that all questions were covered. At the same time, SSJID has not only been picking up the tab for mandated consultant reports and its own staff time but also for LAFCo staff to analyze the documents plus covering the fees for LAFCo lawyers.

The SSJID is currently being billed $15,000 a month for LAFCO’s attorney fees.

The district has now invested over $1.4 million in LAFCO related studies and reimbursements of the county agency’s staff time and expenses related to the application. That includes, as of October 2012, $723,185 paid to LAFCo to cover their direct attorney fees plus some staff time. It also includes the cost of the independent PA Consulting study. The firm, which was recommended by PG&E with the study paid for by SSJID, concluded that the SSJID has the expertise and the financial means to operate and deliver retail power at the reduced rate that the public agency contends they can.

Now the original consulting study that has been studied by LAFCO lawyers and that PG&E has unsuccessfully tried to pick apart for the past three years is being deemed too out of date by LAFCo staff for their governing board to make a decision.

So LAFCo staff is now asking the SSJID to foot a new study that replicates the original PA Consulting report. The cost to the district by the time all costs are factored in will be almost an additional $500,000. That means if a decision is indeed made in a timely manner after a new report is commissioned, SSJID will have spent almost $1.9 million since submitting the current application to LAFCO in the late spring of 2009

The consultant agreed SSJID had the wherewithal to put more than $12 million a year back into the pockets of residents, farmers, businessmen, and government agencies in Manteca, Ripon, and Escalon by purchasing the PG&E retail electrical system that now provides power within the boundaries of the district’s 72,000 acres.

SSJID General Manager Shields is confident that a new study would come to the same conclusion.

Ironically, at several points during the past several years PG&E spokesmen have made statements chiding SSJID for spending the money on the application process - a process that PG&E made more expensive by bringing up more and more challenges even after the initial period for comments had closed. LAFCo has allowed those challenges to be considered past comment deadlines.

The district is paying for the LAFCo review process from Tri-Dam receipts. It is the same income source that PA Consulting noted will make it easy for SSJID to deliver on their promise of 15 percent power rates.

The SSJID has banked more than $60 million in undistributed reserves from Tri-Dam waiting to be given the green light to proceed with their strategy to lower retail power rates.